The shares of Amgen Inc. fell 3.3% on Tuesday, putting it on pace for its biggest single-day percentage decline in more than a year, after the company’s better-than-expected quarterly results were offset by comments on its obesity pipeline that suggested a longer wait than some had expected.
Questions about the company’s obesity pipeline dominated the call with analysts, given expectations for the new class of drugs that have created strong demand for products developed by Novo Nordisk NOVO.B.
NGOs,
and Eli Lilly & Co. LLY,
According to analysts at Morgan Stanley, the obesity market is expected to grow to as much as $100 billion over the next decade.
Upon its call, Amgen AMGN,
said it expects initial data from a Phase 1 trial of its AMG 786 obesity treatment to appear in the first half of 2024. The company has completed enrollment in a Phase 2 trial of its AMG 133 treatment, with peak data expected in late 2024.
With AMG 133 “it’s full steam ahead” and we’re looking forward to data from the Phase 3 trial next year, which will really inform the scope of the Phase 3 trial we’re considering, which could be quite large are.” David M. Reese, executive vice president of research and development, said on the call, according to a FactSet transcript.
The company expects to bring a range of preclinical obesity agents to market “in the coming years,” he added.
Reese later noted that the field is still in its infancy and that much remains to be understood about the “complex metabolic regulations that occur in obesity.”
Amgen’s intention is to play the long game, “as this is one of the greatest public health challenges of the 21st century.”
Reese also said the company plans to invest in the other hot area of the time, artificial intelligence, or AI. The company has one of the largest data sets in the industry, he said, and expects it to be mined.
The biotech, which completed its $27.8 billion acquisition of Horizon Therapeutics plc on Oct. 6, posted net income of $1.730 billion, or $3.22 per share, for the quarter, compared with $2.143 billion, or $3.98 per share. share, in the period a year earlier.
Adjusted earnings per share were $4.96, well above the FactSet consensus of $4.68.
Revenue rose from $6.652 billion to $6.903 billion, close to the FactSet consensus of $6.923 billion.
The company expects sales of Horizon’s Tepezza to be boosted by new prescribers as ophthalmologists and endocrinologists are added to the label. The drug is the only approved treatment for thyroid eye disease, or TED. The Horizon deal allowed the company to expand into rare diseases.
Sales of the company’s Enbrel, which is used to treat autoimmune diseases, fell 6% in the third quarter3. Repatha, a treatment for cholesterol, saw sales increase by 31%, while the osteoporosis treatment Prolio saw sales increase by 14%.
Sales of the cancer drug Lumankras fell 1%, while sales of the psoriasis drug Otzela fell 10%. Sales of the company’s Amjevita, a biosimilar version of AbbVie Inc.’s ABBV,
blockbuster arthritis treatment Humira rose 30%.
For more information read: Amgen’s cancer drug pipeline looks promising despite the FDA setback, analysts say
Amgen now expects full-year adjusted earnings per share of $18.20 to $18.80 and revenue of $28.0 billion to $28.4 billion. The FactSet consensus is for earnings per share of $18.36 and revenue of $27.6 billion.
The stock is up 0.2% this year through Monday’s close, while the S&P 500 SPX,
is up 8.5%.